Demonetisation was "effective", and combined with GST and Aadhaar linking would be the right step to move India to a more transparent system, say analysts polled by Financial Express Online.

The verdict is clear that demonetisation proved to be helpful in tracing black money in the economy.

Demonetisation completes 1 year today, and even as the Narendra Modi government and Opposition trade barbs over the effects of the demonetisation move, common man is left wondering whether the step was worth all the pain that had to be endured. Financial Express Online decided to poll 15 leading economists, researchers and analysts to better gauge the impact demonetisation – and majority of them have given a thumbs up to Modi government’s bold economic move. Few of us can forget the night of November 8, 2016 when Prime Minister Narendra Modi in a surprise address to the nation announced that old Rs 500 and Rs 1000 notes would cease to be legal tender money. The government over the next few days said the demonetisation was aimed at eliminating black money, remove counterfeit currencies and also promote digital transactions.

According to Finance Minister Arun Jaitley, demonetisation was a “watershed moment” that will make India a clean economy. However, even as the Modi government marks November 8 as the ‘Anti-Black’ money day, Oppositions has come out all guns blazing – calling demonetisation a blunder – and terming the anniversary a ‘Black Money’ day. So, what were the benefits of demonetisation? Did demonetisation help detect black money in the economy? Did demonetisation aid in curbing the generation of black money in the economy?

Demonetisation was “effective”, and combined with GST and Aadhaar linking would be the right step to move India to a more transparent system, say analysts polled by Financial Express Online. In a survey of 15 analysts, the verdict is clear that demonetisation proved to be helpful in tracing black money in the economy. While as many as eight analysts found demonetisation “somewhat effective”, three analysts even felt that the step was “effective to a great extent”. Only one economist disagreed with Modi government’s move, stating that it was “not at all effective” in detecting black money. Three economists “couldn’t say” to what extent the move was useful.

Did demonetisation help detect black money in the economy?

No consensus emerges on the question of whether demonetisation helped in slowing pace of black money generation. While four are of the view that it was “effective”, the same number feels it was “somewhat effective”. Four analysts believe that the impact was temporary only, while three “couldn’t say” about the extent of the impact.

Has demonetisation slowed the pace of black money generation?

But more importantly, analysts are of the view that demonetisation followed by GST rollout and Aadhaar linking to PAN and bank accounts are all steps that will work as effective deterrents to generation of black money. As many as 9 analysts feel that the three combined together work better than demonetisation alone. “All of them (demonetisation + GST + Aadhaar linking) are absolutely effective,” says Dhirendra Kumar, CEO of Value Research. Sahil Kapoor of Edelweiss is of the view that the “net effect of factors like GST, Aadhaar, Jan Dhan, Demo which has helped in reducing the generation of black money.”

Agrees Vikas Vasal, National Leader – tax at Grant Thornton India. “Demonetisation along with other measures has helped bring in more transparency in the system. India is largely a tax non-compliant society. Any behavioral change in the society, as large and as diverse like ours, takes time. Therefore, one should not expect overnight results. Demonetisation was indeed a bold step, which sent a strong message to the masses,” says Vasal. “Demonetisation along with a combination of other measures like GST, linking of Aadhaar with PAN, mobiles, bank accounts, and use of data analytics to detect tax evasion is likely to yield results over time,” he adds.

An economist from a leading global bank, who did not wished to be named, stresses on the need for other follow-on measures as well. “Demonetisation if combined by other measures to curb black money flow between asset classes, increasing regulatory checks, legal controls, clamping down on offshore accounts, and GST/Aadhaar linkage are necessary to materially slow black money growth,” the economist says.

Aadhaar is NOT a panacea but a frankenstein: The biometrics-based Aadhaar program is inherently flawed. Biometrics can be easily lifted by external means, there is no need to hack the system. High-resolution cameras can capture your fingerprints and iris information from a distance. Every eye hospital will have iris images of its patients. So another person can CLONE your fingerprints and iris images without your knowledge, and the same can be used for authentication. That is why advanced countries like the US, UK, etc. did not implement such a self-destructive biometrics-based system. If the Aadhaar scheme is NOT STOPPED by the Supreme Court, the biometric features of Indians will soon be cloned, misused, and even traded. If the biometric details of a person are COMPROMISED ONCE, then even a new Aadhaar card will not help the person concerned. This is NOT like blocking an ATM card and taking a new one.

Reply

Arumugam Periyasamy

Nov 9, 2017 at 7:40 am

Already we are in digital world and also can't avoid digital usage best way is , should provide proper info security to data. It looks like american social security number and also America able to use this without issue.
Especially India like big country should have proper integrated national database .. It has multidimensional benefit over population in controlling corruption and provide benefits only to who really need.

Reply

R

Reader

Nov 10, 2017 at 6:28 am

The US Social Security Number (SSN) card has NO BIOMETRIC DETAILS, no photograph, no physical description and no birth date. All it does is confirm that a particular number has been issued to a particular name. Instead, a driving license or state ID card is used as an identification for adults. The US government DOES NOT collect the biometric details of its own citizens for the purpose of issuing Social Security Number. The US collects the fingerprints of only those citizens who are involved in any criminal activity (it has nothing to do with SSN), and the citizens of other countries who come to the US.

Reply

R

Reader

Nov 10, 2017 at 7:41 am

The Aadhaar program was designed in 2009 by mainly considering the 'Identi-ty Cards Act 2006' of UK, but the UK stopped that project in 2010, whereas India continued with the biometrics-based program. We must think why the United Kingdom abandoned their project and destroyed the data collected. (Google: 'Identi-ty Cards Act 2006' and 'Identi-ty Documents Act 2010' )

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G

Girish

Nov 8, 2017 at 1:17 pm

Adhar link is a must and whose income is almost nil should be compensated by the Government , interns like pensions , concessions in Travel facility, This we had suggested since long

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R

RR

Nov 8, 2017 at 1:13 pm

THE ANSWER FOR
" DEMONETISATION GETS THUMBS UP! EXPERTS SAY TOGETHER WITH GST AADHAAR LINKING WILL ATTACK BLACK MONEY"
GOD ONLY KNOWS THAT BLACK OR DARK ABOUT THIS

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S

SUMAN MAITRA

Nov 8, 2017 at 12:13 pm

'Naw Hanyate'
Black money has no physical state, it’s like a soul which never dies, just transform itself from one carrier to another. During demonetization exercise, the black money have just leaved the body of old aged notes of rupees 500 1000 have adopted to a newer young healthy body of rupees 2000. So , ‘Our leaders are of finest men, let then elect again and again’.

Reply

R

Reader

Nov 8, 2017 at 10:48 am

The biometrics-based Aadhaar program is inherently flawed. Biometrics can be easily lifted by external means, there is no need to hack the system. High-resolution cameras can capture your fingerprints and iris information from a distance. Every eye hospital will have iris images of its patients. So another person can CLONE your fingerprints and iris images without your knowledge, and the same can be used for authentication. That is why advanced countries like the US, UK, etc. did not implement such a self-destructive biometrics-based system. If the biometric details of a person are COMPROMISED ONCE, then even a new Aadhaar card will not help the person concerned. This is NOT like blocking an ATM card and taking a new one.

Reply

R

Reader

Nov 8, 2017 at 10:47 am

UK’s Biometric ID Database was dismantled. Why the United Kingdom's biometrics-linked National Identi-ty Card project to create a centralized register of sensitive information about residents similar to Aadhaar was scrapped in 2010?? The reasons were the massive threat posed to the privacy of people, the possibility of a surveillance state, the dangers of maintaining such a huge centralized repository of personal information and the purposes it could be used for, the dangers of such a centralized database being hacked, and the unreliability of such large-scale biometric verification processes. The Aadhaar program was designed in 2009 by mainly considering the 'Identi-ty Cards Act 2006' of UK, but the UK stopped that project in 2010, whereas India continued with the biometrics-based program. We must think why the United Kingdom abandoned their project and destroyed the data collected. (Google: 'Identi-ty Cards Act 2006' and 'Identi-ty Documents Act 2010' )

Reply

R

Reader

Nov 8, 2017 at 10:47 am

A centralized and inter-linked biometric database like Aadhaar will lead to profiling and self-censorship, endangering freedom. Personal data gathered under the Aadhaar program is prone to misuse and surveillance. Aadhaar project has created a vulnerability to identi-ty fraud, even identi-ty theft. Easy harvesting of biometrics traits and publicly-available Aadhaar numbers increase the risk of impersonation, especially online and banking fraud. Centralized databases can be hacked. Biometrics can be cloned, copied and reused. Thus, BIOMETRICS CAN BE FAKED. High-resolution cameras can capture your fingerprints and iris information from a distance. Every eye hospital will have iris images of its patients. So another person can clone your fingerprints and iris images without your knowledge, and the same can be used for authentication. If the Aadhaar scheme is NOT STOPPED by the Supreme Court, the biometric features of Indians will soon be cloned, misused, and even traded.

Reply

R

Reader

Nov 8, 2017 at 10:46 am

The US Social Security Number (SSN) card has NO BIOMETRIC DETAILS, no photograph, no physical description and no birth date. All it does is confirm that a particular number has been issued to a particular name. Instead, a driving license or state ID card is used as an identification for adults. The US government DOES NOT collect the biometric details of its own citizens for the purpose of issuing Social Security Number. The US collects the fingerprints of only those citizens who are involved in any criminal activity (it has nothing to do with SSN), and the citizens of other countries who come to the US.